Business / Companies
New Dawn gold productions scales new highs
14 Mar 2012 at 04:35hrs | Views
New Dawn's consolidated gold production reached a record of 9,095 ounces of gold (8,399 ounces attributable) for the quarter ended December 31, 2011, as compared to 4,808 ounces of gold (4,577 ounces attributable) for the quarter ended December 31, 2010, an increase of 89.2% (83.5% increase on an attributable basis).
Consolidated gold production for the current quarter ended December 31, 2011 increased by 3.2% (2.3% increase on an attributable basis), as compared to the previous quarter ended September 30, 2011 of 8,814 ounces (8,212 ounces attributable).
The production increase during the three months ended December 31, 2011 was achieved through a continued focus on the mines acquired in the June 2010 Central African Gold transaction. Since October 1, 2010, the Company has invested a total of approximately $12,200,000 in property, plant and equipment at its Zimbabwe operations, of which approximately $3,500,000 was invested during the quarter ended December 31, 2011.
GOLD SALES
Consolidated gold sales reached a record of $15,440,766 ($14,238,642 attributable) for the quarter ended December 31, 2011, as compared to $6,458,735 ($6,184,661 attributable) for the quarter ended December 31, 2010, an increase of 139.1% (130.2% increase on an attributable basis). The average sales price per ounce of gold sold was $1,684 for the quarter ended December 31, 2011, as compared to $1,370 for the quarter ended December 31, 2010.
Consolidated gold sales for the current quarter ended December 31, 2011 increased by 9.8% (8.3% increase on an attributable basis), as compared to the previous quarter ended September 30, 2011 of $14,059,739 ($13,145,209 attributable).
100% of sale proceeds were received in US dollars.
NET INCOME AND EBITDA
For the quarter ended December 31, 2011, consolidated net income was $2,298,880, as compared to $2,450,305 for the previous quarter ended September 30, 2011, a decrease of $151,425 or 6.2%. Comparative net income on a quarter-to-quarter basis was impacted by a fiscal 2011 year-end adjustment to the estimated deferred tax liability at September 30, 2011, which was recorded as part of the normal accounting process and caused a commensurate reduction to the total provision for income taxes in the statement of comprehensive income for the quarter ended September 30, 2011. No similar adjustment was recorded in the quarter ended December 31, 2011. Consolidated net income was $212,661 for the quarter ended December 31, 2010.
The Company also provides a non-IFRS financial metric, EBITDA, to assist investors in assessing the Company's operating performance. EBITDA eliminates the impact of income taxes, as well as certain other defined operating and financing costs. Reflecting the Company's improving operating efficiencies and steadily increasing revenues and operating cash flows, quarterly EBITDA has been trending upward. EBITDA was $3,583,788 for the current quarter ended December 31, 2011, as compared to $2,702,477 for the previous quarter ended September 30, 2011, an increase of $881,311 or 32.6%. EBITDA was $1,010,375 for the quarter ended December 31, 2010.
CASH COSTS PER OUNCE
The cash costs per ounce of gold produced for all of the Company's mines were $1,029 for the quarter ended December 31, 2011, as compared to $821 for the quarter ended December 31, 2010, and as compared to $1,038 for the quarter ended September 30, 2011. Cash costs per ounce increased during the quarter ended December 31, 2011, as compared to the quarter ended December 31, 2010, primarily as a result of significant increases during 2011 in various base costs, including labour, power and mine supplies. The Company expects continuing upward pressure on these costs in 2012, as well as a potential increase in environmental costs.
However, as gold production moves toward higher normalized levels and refurbishment programs are completed, the Company expects to realize increased operating efficiencies, with a corresponding expected downward trend in cash costs per ounce.
Royalty rates on gold sales, which are an operating cost, but are not included in the calculation of cash costs of production, increased effective January 1, 2012 to 7.0% from 4.5%.
SUPPORT OF ZIMBABWE ECONOMY
During the quarter ended December 31, 2011, the Company's Zimbabwe operations paid approximately $2,200,000 in respect of royalties, taxes, licence fees, levies and other amounts to the Government of Zimbabwe and to various local authorities. In addition, the Company sources a majority of its operational supplies and services from local Zimbabwean businesses and employs a total of 2,480 workers at its various operations in Zimbabwe.
INDIGENISATION
The Government of Zimbabwe is in the process of implementing an indigenisation policy wherein all domestic businesses are required to be 51% owned by indigenous Zimbabweans. As discussed in the Company's press release dated February 24, 2012, New Dawn is continuing to engage in confidential discussions with the Government of Zimbabwe regarding its proposed Plan of Indigenisation. The Company is also engaging with various indigenous investor groups and possible financing sources with respect to an investment in the Company as part of the implementation of the Company's proposed Plan of Indigenisation. One of these groups was recently advised by the National Indigenisation and Economic Empowerment Board that it has been confirmed as an indigenous company and approved to invest as an indigenous investor in New Dawn.
As there continues to be substantial uncertainty surrounding the implementation of the Indigenisation policy in Zimbabwe, there can be no assurances that the Company will be successful in its efforts to comply with the Indigenisation laws and regulations under commercially viable terms and conditions, or at all. The Company is currently unable to predict the effect of an inability to arrive at or implement an Indigenisation Plan that is acceptable to all parties involved in the process. Further information will be provided to shareholders as and when such discussions have been concluded, or when developments otherwise warrant.
Consolidated gold production for the current quarter ended December 31, 2011 increased by 3.2% (2.3% increase on an attributable basis), as compared to the previous quarter ended September 30, 2011 of 8,814 ounces (8,212 ounces attributable).
The production increase during the three months ended December 31, 2011 was achieved through a continued focus on the mines acquired in the June 2010 Central African Gold transaction. Since October 1, 2010, the Company has invested a total of approximately $12,200,000 in property, plant and equipment at its Zimbabwe operations, of which approximately $3,500,000 was invested during the quarter ended December 31, 2011.
GOLD SALES
Consolidated gold sales reached a record of $15,440,766 ($14,238,642 attributable) for the quarter ended December 31, 2011, as compared to $6,458,735 ($6,184,661 attributable) for the quarter ended December 31, 2010, an increase of 139.1% (130.2% increase on an attributable basis). The average sales price per ounce of gold sold was $1,684 for the quarter ended December 31, 2011, as compared to $1,370 for the quarter ended December 31, 2010.
Consolidated gold sales for the current quarter ended December 31, 2011 increased by 9.8% (8.3% increase on an attributable basis), as compared to the previous quarter ended September 30, 2011 of $14,059,739 ($13,145,209 attributable).
100% of sale proceeds were received in US dollars.
NET INCOME AND EBITDA
For the quarter ended December 31, 2011, consolidated net income was $2,298,880, as compared to $2,450,305 for the previous quarter ended September 30, 2011, a decrease of $151,425 or 6.2%. Comparative net income on a quarter-to-quarter basis was impacted by a fiscal 2011 year-end adjustment to the estimated deferred tax liability at September 30, 2011, which was recorded as part of the normal accounting process and caused a commensurate reduction to the total provision for income taxes in the statement of comprehensive income for the quarter ended September 30, 2011. No similar adjustment was recorded in the quarter ended December 31, 2011. Consolidated net income was $212,661 for the quarter ended December 31, 2010.
CASH COSTS PER OUNCE
The cash costs per ounce of gold produced for all of the Company's mines were $1,029 for the quarter ended December 31, 2011, as compared to $821 for the quarter ended December 31, 2010, and as compared to $1,038 for the quarter ended September 30, 2011. Cash costs per ounce increased during the quarter ended December 31, 2011, as compared to the quarter ended December 31, 2010, primarily as a result of significant increases during 2011 in various base costs, including labour, power and mine supplies. The Company expects continuing upward pressure on these costs in 2012, as well as a potential increase in environmental costs.
However, as gold production moves toward higher normalized levels and refurbishment programs are completed, the Company expects to realize increased operating efficiencies, with a corresponding expected downward trend in cash costs per ounce.
Royalty rates on gold sales, which are an operating cost, but are not included in the calculation of cash costs of production, increased effective January 1, 2012 to 7.0% from 4.5%.
SUPPORT OF ZIMBABWE ECONOMY
During the quarter ended December 31, 2011, the Company's Zimbabwe operations paid approximately $2,200,000 in respect of royalties, taxes, licence fees, levies and other amounts to the Government of Zimbabwe and to various local authorities. In addition, the Company sources a majority of its operational supplies and services from local Zimbabwean businesses and employs a total of 2,480 workers at its various operations in Zimbabwe.
INDIGENISATION
The Government of Zimbabwe is in the process of implementing an indigenisation policy wherein all domestic businesses are required to be 51% owned by indigenous Zimbabweans. As discussed in the Company's press release dated February 24, 2012, New Dawn is continuing to engage in confidential discussions with the Government of Zimbabwe regarding its proposed Plan of Indigenisation. The Company is also engaging with various indigenous investor groups and possible financing sources with respect to an investment in the Company as part of the implementation of the Company's proposed Plan of Indigenisation. One of these groups was recently advised by the National Indigenisation and Economic Empowerment Board that it has been confirmed as an indigenous company and approved to invest as an indigenous investor in New Dawn.
As there continues to be substantial uncertainty surrounding the implementation of the Indigenisation policy in Zimbabwe, there can be no assurances that the Company will be successful in its efforts to comply with the Indigenisation laws and regulations under commercially viable terms and conditions, or at all. The Company is currently unable to predict the effect of an inability to arrive at or implement an Indigenisation Plan that is acceptable to all parties involved in the process. Further information will be provided to shareholders as and when such discussions have been concluded, or when developments otherwise warrant.
Source - Byo24News
